Business Funding in Ontario: Loans, Grants and Cash Advances Compared (2026)
Ontario has more small businesses than any other province, 410,154 small employer businesses by ISED’s latest count, and more ways to fund them than most owners realise. The problem is rarely a shortage of options. It is knowing which one fits your business, your timeline and your credit profile, and not wasting three weeks on an application that was never going to be approved. This guide lays out every realistic route to business funding in Ontario, what each one costs, how long it takes, and who it is actually for.
Quick answer
Ontario businesses have five main routes to funding: bank and credit union loans and lines of credit (cheapest, slowest, hardest to qualify for), government-backed programs such as the Canada Small Business Financing Program and BDC (good terms, paperwork and time required), provincial and federal grants and youth programs (small amounts, specific eligibility), alternative lenders including merchant cash advances (fastest, most accessible, highest cost), and asset-based products such as equipment financing and invoice factoring. Choose by timeline first, then credit profile, then cost.
The Ontario funding landscape at a glance
| Route | Typical amount | Typical cost | Time to funds | Who it suits |
|---|---|---|---|---|
| Bank term loan | $25,000 to $1M+ | About 9% average (2023) | 2 to 8 weeks | 2+ years trading, strong credit, collateral |
| Bank line of credit | $10,000 to $500,000 | About 11% average | 2 to 6 weeks | Established businesses with recurring gaps |
| Canada Small Business Financing Program | Up to $1.15M total | Prime plus up to 3% plus 2% registration fee | 3 to 8 weeks | Asset purchases, leaseholds, some working capital |
| BDC small business loan | Up to $350,000 online | Competitive, varies | 10 to 30 business days | Growth-stage businesses that can wait |
| Grants and youth programs | $3,000 to $75,000 | Free or low cost | Weeks to months | Start-ups, under-40 founders, specific sectors |
| Merchant cash advance | $5,000 to $300,000 | Factor rate 1.1 to 1.5 | 24 to 72 hours | Fast needs, lower credit, no collateral |
| Equipment financing | Asset value | 7% to 20% | 1 to 3 weeks | Trades, restaurants, transport, clinics |
| Invoice factoring | 70% to 90% of invoice | 1% to 4% per month | 1 to 5 days | B2B businesses with slow-paying clients |
Rates and timelines are indicative. Bank averages are from ISED’s 2023 Survey on Financing and Growth of SMEs; BDC timelines are from BDC’s published product pages.
1. Banks and credit unions
Canada’s Big Six (RBC, TD, Scotiabank, BMO, CIBC, National Bank) and Ontario’s credit unions (Meridian, Alterna, DUCA, Libro and others) provide the majority of small business debt in the province. Chartered banks alone supplied 68.5% of approved SME debt financing in 2023, with credit unions at 20.6%. Approval rates are high for those who apply, 88.2% of SMEs had their largest debt request at least partially approved, but the businesses that apply are self-selected: those with two or more years of history, clean financials and a strong personal credit score. Credit unions are worth a specific look in Ontario; they tend to be more flexible on history and more willing to look at the owner as a person.
Best for: established businesses with time to spare and assets to pledge. Weak for: anything urgent, anything under two years old, anyone with a damaged credit file. Our MCA vs business loan comparison goes deeper on the trade-offs.
2. Canada Small Business Financing Program (CSBFP)
A federal program administered by ISED in which the government shares the lender’s risk. You apply through a participating bank or credit union, not through the government. Under current rules the program supports up to $1.15 million in total per borrower: up to $1 million for real property, equipment and leasehold improvements, and up to $150,000 for working capital and intangible assets. Interest is capped at the lender’s prime rate plus 3% for variable-rate loans, and a 2% registration fee applies. Eligibility requires gross annual revenue of $10 million or less. The CSBFP is excellent value for buying equipment or fitting out premises, less so for pure cash flow needs, and it still requires the lender’s own underwriting.
3. Business Development Bank of Canada (BDC)
BDC is the federal Crown corporation for entrepreneurs. Its online small business loan goes up to $350,000, with flexible terms including interest-only periods, and BDC publishes approval timelines of around 10 business days for loans under $100,000 and up to 30 business days for larger amounts. BDC is more willing than the banks to fund growth-stage and underserved businesses, and it offers advisory services alongside the money. It is not fast, and it still looks at credit and financials.
4. Grants, youth programs and Ontario-specific support
Grants are the cheapest money there is, and the most competitive. Realistic options for Ontario businesses include:
- Futurpreneur Canada: up to $75,000 in financing for founders aged 18 to 39 (a Futurpreneur loan plus a BDC co-loan) with two years of mentorship.
- Starter Company Plus: delivered through Ontario’s Small Business Enterprise Centres, with training and a grant of up to $5,000 for new and young businesses. Availability varies by region and intake.
- Summer Company: up to $3,000 for student entrepreneurs aged 15 to 29.
- FedDev Ontario: federal regional development funding for southern Ontario, generally aimed at larger growth, innovation and manufacturing projects.
- Sector and municipal programs: many Ontario municipalities run small business grants, façade improvement programs and digital adoption support through their economic development offices.
Program details change with each budget cycle, so check the current terms on the program’s own site before planning around them. The federal Innovation Canada business benefits finder is the fastest way to see what you qualify for today.
5. Merchant cash advances and alternative lenders
Online and alternative lenders provided just 2.2% of approved SME debt in 2023, but they serve a disproportionate share of the businesses the banks turn away. A merchant cash advance is the most common product: a lump sum against future sales, repaid as a fixed percentage of daily or weekly revenue, approved on bank statements rather than credit score, and funded in 24 to 72 hours. There is no interest rate; the cost is a factor rate, typically 1.1 to 1.5, which our factor rates guide explains and the MCA calculator turns into dollars.
The same structure is sometimes sold as a business cash advance or revenue-based financing. Whatever the label, the questions are the same: what is the total repayment in dollars, does the remittance genuinely flex with sales, and are you dealing with a direct funder or a broker. Our guide to the best merchant cash advance companies in Canada covers how to choose.
Best for: urgent needs, businesses under two years old, lower credit, no collateral, lumpy revenue. Weak for: anyone who can get a bank line on their timeline, and anyone trying to fund an ongoing loss.
6. Equipment financing and invoice factoring
If the money is for a specific asset, equipment financing uses the asset itself as security, which makes it more accessible than an unsecured loan and often cheaper than an advance. If you are a B2B business waiting 30 to 90 days on invoices from reliable customers, invoice factoring converts those receivables to cash in days, with the factor’s decision resting on your customers’ credit rather than yours. Neither helps a retailer or restaurant with no invoices and no new equipment to buy, which is where the merchant cash advance earns its place.
How to choose: three questions
How soon do you need the money?
Days: merchant cash advance or invoice factoring. Weeks: BDC, equipment financing, a credit union. Months: bank term loan, CSBFP, grants.
What does your credit file look like?
Strong personal credit and two years of financials opens every door. Thin or damaged credit narrows the field to revenue-based and asset-based products. See business funding with bad credit in Canada for what lenders look at instead.
What is the money for?
Equipment or premises: CSBFP or equipment financing. Receivables gap: factoring or a line of credit. Inventory, payroll, a time-limited opportunity: a line if you have one, an advance if you do not. Start-up costs: Futurpreneur, Starter Company Plus, BDC.
Business funding for Ontario businesses with Magical Business
Magical Business is a subsidiary of Magical Credit Inc., a Canadian lender since 2014, and we provide merchant cash advances up to $300,000 to businesses registered and operating in Ontario. We fund directly, approve on your last three months of bank statements, charge no application fee, and check eligibility with a soft credit pull. If you qualify, funds can be in your account within 24 hours of approval. If another route on this page is a better fit for you, we will say so.
See who qualifies · How it works · Check your eligibility in two minutes
Frequently asked questions
What is the easiest business loan to get in Ontario?
A merchant cash advance is generally the easiest to qualify for because approval is based on monthly revenue rather than credit score. Credit unions are usually the most flexible of the traditional lenders.
Does the Ontario government give small business loans?
Not directly. Ontario supports small businesses through grants and training delivered by Small Business Enterprise Centres, and through programs like Starter Company Plus and Summer Company. Loans come from banks, credit unions, BDC and the federally backed CSBFP.
How much can a small business borrow in Ontario?
It depends on the product: up to $1.15 million through CSBFP, up to $350,000 online from BDC, up to $300,000 from Magical Business as a merchant cash advance, and bank lines of credit commonly up to $500,000.
Can a new business get funding in Ontario?
Yes, though the options narrow. Futurpreneur and Starter Company Plus target new businesses. A merchant cash advance needs at least three months of trading and $5,000 or more in monthly sales. Banks generally want two years.
How fast can I get business funding in Ontario?
A merchant cash advance can fund within 24 hours of approval. Invoice factoring takes days. Banks, BDC and CSBFP take weeks. See how to get fast business funding in Canada.
Sources
ISED, Key Small Business Statistics 2025 (Ontario: 410,154 small employer businesses). Statistics Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2023 (68.5% chartered banks, 20.6% credit unions, 2.2% online lenders, 88.2% approval). ISED, Summary of the Survey on Financing and Growth of SMEs 2023 (average rates: 9% term loans, 11% lines of credit, 19% credit cards). ISED, Canada Small Business Financing Program. BDC, Small Business Loan product page. Futurpreneur Canada. Ontario Small Business Enterprise Centres.